Balanced funds are primarily designed to invest in which types of securities?

Balanced funds are structured to invest in both equity and fixed-income securities. This dual approach allows them to aim for a balance of risk and return, as they seek to provide growth potential through equities while also offering some level of stability and income through fixed-income investments. By combining these two types of securities, balanced funds can cater to investors looking for a moderate risk profile compared to those who might focus solely on equities or fixed-income investments.

Investing in both categories helps in mitigating the volatility that may come from being exclusively in stocks while still allowing for growth opportunities. This balanced approach is particularly appealing to investors who may be looking for a diversified portfolio within a single investment vehicle.

The other options focus exclusively on one type of security or another, which does not align with the fundamental objective of balanced funds. The goal is to achieve a middle ground that harnesses the strengths of both asset classes for a more holistic investment strategy.